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U.S. Securities and Exchange Commission

UNITED STATES OF AMERICA
Before The
SECURITIES AND EXCHANGE COMMISSION

ADMINISTRATIVE PROCEEDING

FILE NO. 3-10268

Securities Exchange Act of 1934
Release No. 43422 / October 6, 2000

In the Matter of

HERBERT M. CAMPBELL II
1612 San Patricio S.W.
Albuquerque, New Mexico 87104

ORDER DENYING MOTION TO LIFT TEMPORARY SUSPENSION AND DIRECTING HEARINGS

Herbert M. Campbell II, who was senior vice president and general counsel of Solv-Ex Corporation, has filed a petition, pursuant to Rule 102(e)(3)(ii) of our Rules of Practice, seeking either to lift his temporary suspension from practice before this Commission or to set the matter down for hearing.

The suspension was based on a permanent injunction, entered against Campbell in an action brought by this Commission, enjoining him from violating Section 17(a) of the Securities Act, Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder, and Section 13(a) of the Exchange Act.1 Campbell had primary responsibility for drafting Solv-Ex press releases and reviewing the company's public statements about its projects. The Court found, among otherthings, that Campbell, a Solv-Ex control person with access to substantial negative information about those projects, chose largely to ignore that information indrafting misleadingly optimistic press releases. The Court further concluded that Solv-Ex filed materially false reports with this Commission, and that Campbell knew or should have known that the information contained in those filings was false or misleading.

Campbell argues that a suspension is unduly harsh. His major contention is that the Court's findings do not justify his suspension since he did not know, or even suspect, that Solv-Ex's public statements were false or misleading but reasonably relied on the information supplied by others who were in a position to know the facts.

Campbell's assertions appear to be inconsistent with the findings of the Court, which Campbell is precluded from contesting in this proceeding.2 The Court found that Campbell engaged in serious misconduct. Its findings justify the continuance of Campbell's suspension until it can be determined what, if any, action may be appropriate to protect this Commission's processes. We consider, however, that Campbell should be given the opportunity to present evidence at a public hearing.

Accordingly, IT IS ORDERED that the petition of Herbert M. Campbell II to lift our order of temporary suspension be, and it hereby is, denied; and it is further

ORDERED that this proceeding be set down for public hearings before an administrative law judge in accordance with Rule 110 ofour Rules of Practice. As specified in Rule 102(e)(3)(iii), the hearings in this matter shall be expedited in accordance with Rule 500.

By the Commission.

Jonathan G. Katz
Secretary


Footnotes

1 SEC v. Solv-Ex Corp., et al., No. CIV 98-860 BB/RLP (D. N.Mex. May 16, 2000).

2 See Rule 102(e)(3)(iv).

http://www.sec.gov/litigation/admin/34-43422.htm


Modified:10/04/1999